Since its foundation in 2015, the Japan Chevening Alumni Network (JCAN) has been regularly organising events to meet, share, and exchange views, opinions, and ideas for creating positive change in various fields and industries globally. Most recently, in April 2022, the JCAN organised a speakers’ forum , with funding support from the British Embassy in Tokyo, to talk about green bond market development in Asia.

The session was led by Mr Satoru Yamadera of the Asian Development Bank (ADB), a Chevening alumnus who undertook his scholarship in 1993 at the London School of Economics and Political Science.

What exactly are green bonds?

Green bonds raise funds for new and existing projects which deliver environmental benefits. They’re important because they encourage sustainable investing.

According to Mr. Yamadera, Asian local currency green bond markets are expanding rapidly – their total size has exceeded that of North America – but ultimately they are still limited to the People’s Republic of China, Japan, and the Republic of Korea. This may be due to the smaller economic and market sizes of ASEAN member states, but further information, dissemination, and awareness creation would improve the situation. Thus, ADB is committing to putting more effort into ASEAN markets.

Mr. Yamadera and ADB is committed to developing green, social, and sustainable bond markets in the region.

Encouraging sustainable investment in Asia

Mr. Yamadera emphasized the importance of a tailor-made approach to developing the market.

Development of market infrastructure, readiness, matureness of market participants, and policy support, differs by country. The approach therefore needs to be different depending on the situation of each market.

Climate change impact is not the only consideration that needs to be taken into account when considering green bonds. Considering the social impact of related projects and activities is also crucial. COVID-19 made Asian investors realize the importance of healthcare, sanitation, education, and other socially important infrastructures, an effect that demonstrates how the framework of sustainable (also known as thematic) finance needs to be more inclusive and socially impactful.

Challenges that need to be overcome

During the speakers’ forum, alumni participants raised questions on the process of issuing, and recognising the value of, green bonds. The process is inevitably complicated, and additional costly processes such as green verification would be required, but Mr. Yamadera emphasised the necessity of improving communication with key stakeholders.

This means not only equity holders but also customers and employees, which should be taken into account as a part of improving governance overall.

Greater clarity around the process of issuing green bonds would improve the transparency of corporate activities. This would result in greater transparency with stakeholders, which in turn would demonstrate good management and governance. This ultimately gives a positive signal to the market. More and more investors are looking at these commitments as prerequisites when they make investment decisions.

Next steps

Overall, the session was successful in inspiring thought-provoking discussion, and served as an important event amongst JCAN’s schedule.

The event was concluded by closing remarks from Mr. Itsushi Tachi, a Chevening alumnus currently serving as the President of JCAN.

“We hope to continue running such informative sessions, and encourage other alumni groups globally to hold similar events to exchange their ideas on the topic.”


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